Middleby CEO: Viking staying in Greenwood is ‘not negotiable’
Published: February 8,2013
That was the primary message Middleby Corp. CEO Selim Bassoul laid out during a press conference one day after 20 percent of Viking’s workforce was terminated. Of the layoffs, half were in Greenwood.
Despite that, Bassoul said Viking would remain in Greenwood.
“That is not negotiable,” he said. “Viking is a bright shining beacon for Greenwood, the Mississippi Delta and the state.
“We are not shutting down Viking. I assured (former CEO) Fred Carl that we’re not going to outsource Viking to some other facility or to China. We like this community.”
Bassoul said there were three reasons for the layoffs: The U.S. housing market’s having 585,000 starts in 2012, which is about half what it was in 2007, right before the recession took hold. “We cannot sustain the same level of employment” with those numbers, Bassoul said. Second is pressure from new competitors, some of them overseas, combined with new government regulations regarding energy usage standards for new dishwashers and refrigeration tools that Bassoul said require new investment.
“Number three, we have our own internal issues related to our refrigeration and dishwashing plant. We have to restructure the business to operate more efficiently.”
Viking management dealt with the same issues before Middleby acquired the company late last year. “I never lied. I was candid that there would be some layoffs taking place (in January),” Bassoul said. “But I didn’t want it to be Chinese torture. It was going to be one, swift move, and then we’d be done. It hurts all parties to see some people gone.”
Those employees laid off received a minimum of four months’ salary and benefits, Bassoul said. Some received more based on tenure at Viking. The severance packages cost Middleby a total cost of $2 million.
Bassoul said he hoped at least some of the former employees could be rehired, something that could be achieved by growing Viking’s sales.
Viking’s sales since 2008 have hovered around $200 million, which is half of what they were in 2006, before the collapse of new home construction that was a symptom of the real estate market that led the U.S. into recession.
“I would like to see Viking be a billion-dollar company,” Bassoul said.
To get there, Bassoul said, will require capital investment in the company. Since the acquisition, Bassoul said Middleby has spent $1 million to buy equipment for the Greenwood facility. He added that Viking had been trying before the sale to outsource its dishwasher and refrigeration work. Middleby plans to invest $5 million to keep those jobs in Greenwood. Bassoul said the company would ask the state for some kind of assistance, but did not provide details.
Middleby’s plan to grow Viking include eliminating the cooking schools outside of Greenwood and eliminating the company’s cutlery, cookware and small electric appliance business. The cooking schools in Memphis and Ridgeland will operate through the end of March. The Alluvian boutique hotel will stay open.
“We want to build great appliances,” Bassoul said. “That’s what provides a good living standard.”
Middleby also plans to build a technology center in Greenwood that will serve to showcase all Middleby products. Bassoul did not provide a timetable for construction or a cost estimate.
Middleby Corp. bought Viking for $380 million late last year. The Illinois-based commercial cooking equipment maker said then that the acquisition would help the company get a foothold in the residential kitchen appliance market. Middleby did $1 billion in sales in 2012.
Viking founder and former CEO Fred Carl Jr. said immediately after the sale that he planned to stay with the company. That changed the day of the layoffs, when he announced he would retire.
>>CONTINUE READING Former CEO Fred Carl told Viking employees in emails to expect few changes
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